Iowa General Assembly Daily Bills, Amendments & Study Bills March 17, 2009



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HF 748

House File 748 - Introduced

HOUSE FILE

BY COMMITTEE ON COMMERCE
(SUCCESSOR TO HF 339)

Passed House, Date Passed Senate, Date

Vote: Ayes Nays Vote: Ayes Nays

Approved


A BILL FOR
1 An Act providing for the establishment of small wind innovation

2 zones, providing for the applicability of tax credits, and

3 including effective and retroactive applicability date

4 provisions.

5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

6 TLSB 1348HV 83

7 rn/nh/8

House File 748 - Introduced continued


PAG LIN

1 1 Section 1. NEW SECTION. 476.48 SMALL WIND INNOVATION

1 2 ZONE PROGRAM.

1 3 1. DEFINITIONS. For purposes of this section, unless the

1 4 context otherwise requires:

1 5 a. "Electric utility" means a public utility that

1 6 furnishes electricity to the public for compensation and which

1 7 enters into a model interconnection agreement with the owner

1 8 of a small wind energy system as provided in subsection 4.

1 9 b. "Small wind energy system" means a wind energy

1 10 conversion system that collects and converts wind into energy

1 11 to generate electricity which has a nameplate generating

1 12 capacity of one hundred kilowatts or less.

1 13 c. "Small wind innovation zone" means a political

1 14 subdivision of this state, including but not limited to a

1 15 city, county, township, school district, community college,

1 16 area education agency, institution under the control of the

1 17 state board of regents, or any other local commission,

1 18 association, or tribal council which adopts, or is encompassed

1 19 within a local government which adopts, the model ordinance as

1 20 provided in subsection 3.

1 21 2. PROGRAM ESTABLISHED.

1 22 a. The utilities division shall establish and administer a

1 23 small wind innovation zone program to optimize local,

1 24 regional, and state benefits from wind energy and to

1 25 facilitate and expedite interconnection of small wind energy

1 26 systems with electric utilities throughout this state.

1 27 Pursuant to the program, the owner of a small wind energy

1 28 system located within a small wind innovation zone desiring to

1 29 interconnect with an electric utility shall benefit from a

1 30 streamlined application process, may utilize a model

1 31 interconnection agreement, and can qualify under a model

1 32 ordinance.

1 33 b. A political subdivision seeking to be designated a

1 34 small wind innovation zone shall apply to the division upon a

1 35 form developed by the division. The division shall approve an


House File 748 - Introduced continued
2 1 application which documents that the applicable local

2 2 government has adopted the model ordinance or is in the

2 3 process of amending an existing zoning ordinance to comply

2 4 with the model ordinance and that an electric utility

2 5 operating within the political subdivision has agreed to

2 6 utilize the model interconnection agreement to contract with

2 7 the small wind energy system owners who agree to its terms.

2 8 3. MODEL ORDINANCE. The Iowa league of cities, the Iowa

2 9 association of counties, the Iowa environmental council, the

2 10 Iowa wind energy association, and representatives from the

2 11 utility industry shall consult and develop a model ordinance

2 12 to be offered on both the Iowa league of cities' and the Iowa

2 13 association of counties' internet sites and made available for

2 14 use by a local government which constitutes or encompasses a

2 15 political subdivision that is applying for designation as a

2 16 small wind innovation zone. A local government adopting the

2 17 model ordinance shall establish an expedited approval process

2 18 with regard to small wind energy systems in compliance with

2 19 the ordinance in order to qualify as a small wind innovation

2 20 zone.

2 21 4. MODEL INTERCONNECTION AGREEMENT. The utilities board

2 22 shall develop a model interconnection agreement by June 1,

2 23 2010, for utilization within a small wind innovation zone by

2 24 the owner of a small wind energy system seeking to

2 25 interconnect with an electric utility. The interconnection

2 26 agreement shall ensure that the energy produced can be safely

2 27 interconnected with the utility without causing any adverse or

2 28 unsafe consequences and is consistent with the electric

2 29 utility's resource needs. The board shall establish by rule

2 30 procedures for modification of the model interconnection

2 31 agreement upon mutually agreeable terms and conditions in

2 32 unique or unusual circumstances, subject to board approval.

2 33 Electric utilities shall consider adopting the model

2 34 interconnection agreement.

2 35 5. TAX CREDIT INCENTIVES. The owner of a small wind
House File 748 - Introduced continued
3 1 energy system operating within a small wind innovation zone

3 2 shall qualify for the wind energy production tax credit

3 3 pursuant to chapter 476B, subject to section 476B.5,

3 4 subsection 4.

3 5 6. REPORTING REQUIREMENTS. The division shall prepare a

3 6 report summarizing the number of applications received from

3 7 political subdivisions seeking to be designated a small wind

3 8 innovation zone, the number of applications granted, the

3 9 number of small wind energy systems generating electricity

3 10 within each small wind innovation zone, and the amount of wind

3 11 energy produced, and shall submit the report to the members of

3 12 the general assembly by January 1 annually.

3 13 Sec. 2. Section 476B.5, Code 2009, is amended by adding

3 14 the following new subsection:

3 15 NEW SUBSECTION. 2A. Notwithstanding any provision of this

3 16 chapter to the contrary, a small wind energy system operating

3 17 within a small wind innovation zone as provided in section

3 18 476.48 shall be approved as a qualified facility. The board

3 19 shall by rule establish a streamlined application process

3 20 applicable for small wind innovation zone applicants.

3 21 Sec. 3. Section 476B.5, subsection 4, Code 2009, is

3 22 amended to read as follows:

3 23 4. The maximum amount of nameplate generating capacity of

3 24 all qualified facilities the board may find eligible under

3 25 this chapter shall not exceed four hundred fifty megawatts of

3 26 nameplate generating capacity. Fifty percent of the maximum


3 27 amount of nameplate generating capacity remaining unallocated

3 28 on the effective date of this Act shall be reserved for

3 29 issuance of tax credit certificates to small wind energy

3 30 systems operating within a small wind innovation zone pursuant

3 31 to section 476.48.

3 32 Sec. 4. Section 476B.6, subsection 1, Code 2009, is

3 33 amended to read as follows:

3 34 1. a. To be eligible to receive the wind energy

3 35 production tax credit, the owner must first receive approval
House File 748 - Introduced continued

4 1 of the board of supervisors of the county in which the

4 2 qualified facility is located. The application for approval

4 3 may be submitted prior to commencement of the construction of

4 4 the qualified facility but shall be submitted no later than

4 5 the close of the owner's first taxable year for which the

4 6 credit is to be applied for. The application must contain the

4 7 owner's name and address, the address of the qualified

4 8 facility, and the dates of the owner's first and last taxable

4 9 years for which the credit will be applied for. Within

4 10 forty=five days of the receipt of the application for

4 11 approval, the board of supervisors shall either approve or

4 12 disapprove the application. After the forty=five=day limit,

4 13 the application is deemed to be approved. This paragraph


4 14 shall not apply to a small wind energy system operating within

4 15 a small wind innovation zone pursuant to section 476.48.

4 16 b. Upon approval of the application, or if the owner



4 17 operates a small wind energy system within a small wind

4 18 innovation zone pursuant to section 476.48, the owner may

4 19 apply for the tax credit as provided in subsection 2. In

4 20 addition, approval of the application, or applying for the tax

4 21 credit if the owner operates a small wind energy system within

4 22 a small wind innovation zone, is acceptance by the applicant

4 23 for the assessment of the qualified facility for property tax

4 24 purposes for a period of twelve years and approval by the

4 25 board of supervisors for the payment of the property taxes

4 26 levied on the qualified property to the state. For purposes

4 27 of property taxation, the qualified facility shall be

4 28 centrally assessed and shall be exempt from any replacement

4 29 tax under section 437A.6 for the period during which the

4 30 facility is subject to property taxation. The property taxes

4 31 to be paid to the state are those property taxes which make up

4 32 the consolidated tax levied on the qualified facility and

4 33 which are due and payable in the twelve=year period beginning

4 34 with the first fiscal year beginning on or after the end of

4 35 the owner's first taxable year for which the credit is applied


House File 748 - Introduced continued
5 1 for. Upon approval of the application, or notification by the

5 2 board to the county board of supervisors of a tax credit

5 3 application in the case of a small wind energy system, the

5 4 board of supervisors shall notify the county treasurer to

5 5 state on the tax statement which lists the taxes on the

5 6 qualified facility that the amount of the property taxes shall

5 7 be paid to the department. Payment of the designated property

5 8 taxes to the department shall be in the same manner as

5 9 required for the payment of regular property taxes and failure

5 10 to pay designated property taxes to the department shall be

5 11 treated the same as failure to pay property taxes to the

5 12 county treasurer.

5 13 c. Once the owner of the qualified facility receives

5 14 approval under paragraph "a", if required, subsequent approval

5 15 under paragraph "a" is not required for the same qualified

5 16 facility for subsequent taxable years.

5 17 Sec. 5. EFFECTIVE AND APPLICABILITY DATES. This Act,

5 18 being deemed of immediate importance, takes effect upon

5 19 enactment and applies retroactively to tax years beginning on

5 20 or after January 1, 2009.

5 21 EXPLANATION

5 22 This bill establishes a small wind innovation zone program,

5 23 to be administered by the utilities division of the department

5 24 of commerce, with the objective to optimize local, regional,

5 25 and state benefits from wind energy and to facilitate and

5 26 expedite interconnection of small wind energy systems with

5 27 electric utilities throughout this state. Pursuant to the

5 28 program, the bill provides that an owner of a small wind

5 29 energy system located within a small wind innovation zone

5 30 desiring to interconnect with an electric utility shall

5 31 benefit from a streamlined application process, may utilize a

5 32 model interconnection agreement, and can qualify under a model

5 33 ordinance.

5 34 The bill defines a "small wind energy system" as a wind

5 35 energy conversion system that collects and converts wind into
House File 748 - Introduced continued
6 1 energy to generate electricity which has a nameplate

6 2 generating capacity of less than or equal to 100 kilowatts.

6 3 The bill defines a "small wind innovation zone" as a political

6 4 subdivision of this state, including but not limited to a

6 5 city, county, township, school district, community college,

6 6 area education agency, institution under the control of the

6 7 state board of regents, or any other local commission,

6 8 association, or tribal council which adopts, or is encompassed

6 9 within a local government which adopts, a model ordinance.

6 10 The bill states that a model ordinance applicable to small

6 11 wind innovation zones shall be developed by specified

6 12 associations and entities. A local government adopting the

6 13 model ordinance is required to establish an expedited approval

6 14 process with regard to small wind energy systems in compliance

6 15 with the ordinance, or to modify preexisting zoning provisions

6 16 or restrictions which differ from the model ordinance to

6 17 conform with the model ordinance prior to the granting of

6 18 board approval for a political subdivision to qualify as a

6 19 small wind innovation zone.

6 20 The bill directs the Iowa utilities board to develop a

6 21 model interconnection agreement by June 1, 2010, for

6 22 utilization within a small wind innovation zone by the owner

6 23 of a small wind energy system seeking to interconnect with an

6 24 electric utility. The bill further directs the board to

6 25 establish by rule procedures for modification of the model

6 26 interconnection agreement upon mutually agreeable terms and

6 27 conditions in unique or unusual circumstances, subject to

6 28 board approval. Electric utilities are directed to consider

6 29 adopting the model agreement.

6 30 The bill establishes annual reporting requirements

6 31 applicable to the division with regard to the program. The

6 32 bill also provides a tax credit incentive for small wind

6 33 energy sytem owners by reserving 50 percent of the nameplate

6 34 generating capacity remaining unallocated with respect to the

6 35 wind energy production tax credit on the bill's effective date

House File 748 - Introduced continued
7 1 for issuance of tax credit certificates to small wind energy

7 2 systems operating within a small wind innovation zone. The

7 3 bill provides that a small wind energy system operating within

7 4 a small wind innovation zone shall be approved as a qualified

7 5 facility for purposes of tax credit eligibility, and that the

7 6 board shall by rule establish a streamlined application

7 7 process applicable for small wind innovation zone applicants.

7 8 The bill makes other conforming changes to Code chapter 476B

7 9 consistent with small wind energy system qualification for the

7 10 wind energy tax credit.

7 11 The bill takes effect upon enactment and applies

7 12 retroactively to tax years beginning on or after January 1,

7 13 2009.

7 14 LSB 1348HV 83

7 15 rn/nh/8




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